Blog

Last September at ICIC’s Inner City Economic Summit in Detroit, participants gained a nuanced glimpse of Detroit’s struggles and its strengths. Against the backdrop of Detroit’s continued economic struggles, high unemployment rates and foreclosures, speakers also highlighted the initiatives and investment that have brought the city together to revitalize its struggling neighborhoods.

Keynote speaker Matthew Cullen, President and CEO of Rock Ventures, emphasized that Detroit’s story is changing. At the time he spoke, Rock Ventures’ investment in downtown Detroit totaled $1.8 billion. Rock Ventures is one of several private investors that have worked to return commerce to downtown Detroit. Several major companies, including Twitter, General Motors and Ally Bank, have relocated major offices to downtown Detroit, and Midtown Detroit has seen over $2 billion in investment and over 3,800 new housing units since 2000.

This month, in our City Close Up series, we have focused on Detroit. On February 11, Staples and ICIC held a workshop, Paving a Path to Growth, that convened Detroit business leaders for a panel featuring several leading Inner City 100 alumni CEOs who discussed how to balance core company values with growth.The CEO speakers emphasized that their success in doing so has been a product of their ability to balance two seemingly disparate forces: change and consistency. These companies have managed to shift priorities in order to thrive during economic uncertainty, but to do so without losing sight of the values on which their companies were founded.

Last month, we spoke with the panel’s moderator, Dustin Walsh, a senior reporter for Crain’s Detroit Business, who offered a similar prescription for Detroit’s future economic success. While predicting that “the auto industry will always be the life blood of this city,” Walsh also discussed the ways the technologies and companies have evolved. “Now there’s a renewed interest in creating jobs for Detroiters, people who live in the city, not just in the suburbs. There’s a re-focus on making Detroit an economic center for people who actually live there.”

Perry Mehta, CEO of FutureNet Group, spoke to us about his dedication to Detroit. “It’s a big-small city, with all the great aspects of a big city but you don’t feel like you get lost. Everyone is friendly,” he said. “It’s become my home away from home.” Mehta’s business is also helping to improve economic prospects in his adopted hometown, creating accessible jobs for 250 people, with 400 new jobs projected to accompany a new facility slated to open later this year.

Despite these business successes, Detroit’s story is complicated – the city famously declared bankruptcy in 2013, but it emerged with a cost cutting and reinvestment plan in 2014. Despite commentary calling Detroit “the next Brooklyn” and a hotspot for artists, and despite worries about gentrification, the city has massive vacancies: its population dropped from a peak of 1.8 million in 1950 to less than 714,000 in 2010. In 2014, this number was estimated to have dropped even further, to just over 680,000. Detroit is extremely large, encompassing about 140 square miles of land. The population decrease has left the city with an unprecedented amount of vacancies and blight.

Detroit was an appropriate location for our 2015 Inner City Economic Summit, which revisited some of the seminal research of ICIC’s founder, Harvard Business School Professor Michael Porter. Over two decades, ICIC has worked in multiple capacities on the ground in Detroit, including on a study that laid groundwork for Detroit’s multi-stakeholder planning project, Detroit Future City. In 2012 we studied Detroit’s food cluster, identifying its strengths and potential to kickstart economic growth. This year’s Summit attendees had the chance to see that potential firsthand, visiting the Eastern Market to learn about its work to cultivate an inclusive food economy.

ICIC’s research has found that, along with business environment and clusters, individual firms are a driver of economic growth. Detroit’s leaders are making key investments in both business environment and clusters, and our Inner City 100 winners are showing that some companies continue to thrive in Detroit’s inner city. Moderating this month’s Paving a Path to Growth workshop, Walsh noted that most jobs within the city of Detroit are actually held by residents of the suburbs. Providing jobs and opportunity for inner city residents, he said, is both “for the greater good and greater for business overall.”